Leverage Points

I think one of the better disciplines to take in University is Process Control Engineering.  I never really studied it too deeply but I have a pretty good understanding of it, having worked in a few processing plants.  The interesting thing about process control is that you get a pretty good idea about how systems work and, if you’re keen enough, you start to realize that these principles can be applied to much broader things than a pump or valve in a process plant.

Systems engineers know all about this stuff, and I’m pretty sure economists and consultants study this stuff like crazy.  What I don’t understand is why we don’t see more systems engineers in politics or in the higher levels of government, because really what you’re dealing with at this point are systems.  The collapse of the financial system was caused by the slow removal of several negative feedback loops and controls that were implemented in the 1930s.  What I think happened is that a lot of people were concentrating on removing the loops in their particular system, without considering how this affected the greater system.  I think this occurred in multiple places and finally eroded enough checks and balances that things fell apart.  The mortgage crisis was the result of a positive feedback loop (run up in housing prices) that was destined to destroy itself.

There is a great article on this called leverage points.  I’m going to post it here.  It’s terrific.  It is very dense, not so much as wordy, but extremely dense with ideas.  The article discusses the top twelve places to apply leverage if you want to change a system. I’ll list them, but I recommend reading the entire article.

12. Constants, parameters, numbers (such as subsidies, taxes, standards)

11. The sizes of buffers and other stabilizing stocks, relative to their flows.

10. The structure of material stocks and flows (such as transport networks, population age structures)

9. The lengths of delays relative to the rate of system change

8. The strength of negative feedback loops, relative to the impacts they are trying to correct against

7. The gain around driving positive feedback loops

6. The structure of information flows (who does and does not have access to what kings of information)

5. The rules of the system (such as incentives, punishments, constraints)

4. the power to add, change, evolve, or self-organize system structure

3. The goals of the system

2. The mindset or paradigm out of which the system – its goals, structure, rules, delays, parameters – arise

1. The power to transcend paradigms

This is a short summary, and I am not doing the report any justice whatsoever.  It was written by Donella Meadows of MIT. Do yourself a favor.  Read it.  It will blow your mind, unless you’re a systems engineer… then you might just say, “uh huh”…

For full document, click here

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